The governor unveils a proposal that would cut the welfare-to-work program and reduce child care for the needy. 'California no longer has low-hanging fruits,' he says.

Reporting from Sacramento — Proposing a budget that would eliminate the state's welfare-to-work program and most child care for the poor, Gov. Arnold Schwarzenegger on Friday outlined a stark vision of a California that would sharply limit aid to some of its poorest and neediest citizens.

His $83.4-billion plan would also freeze funding for local schools, further cut state workers' pay and take away 60% of state money for local mental health programs. State parks and higher education are among the few areas the governor's proposal would spare.

The proposal, which would not raise taxes, also relies on $3.4 billion in help from Washington — roughly half of what the governor sought earlier this year — to help close a budget gap now estimated at $19.1 billion. Billions more would be saved through accounting moves and fund shifts.

"California no longer has low-hanging fruits," said Schwarzenegger at an afternoon news conference in Sacramento. "I now have no choice but to … call for elimination of some very important programs."

Elimination of CalWorks, the state's main welfare program, would affect 1.3 million people, including about 1 million children. The program, which requires recipients to eventually have jobs, gives families an average $500 a month. Ending those payments would save the state $1.6 billion, the administration said. It would also make California the only state not to offer a welfare-to-work program for low-income families with children.

Lawmakers rejected previous attempts by the governor to eliminate the program.

Families would also lose state-subsidized day care under the governor's proposal; about 142,000 low-income children would be affected. That would save the state $1.2 billion. Preschool and after-school care would remain in place, as would some federally subsidized day care.

Schwarzenegger's latest budget proposal is a starting point for negotiations that typically stretch well into the summer. His previous attempts to eliminate landmark state services have been upended by lawmakers who nevertheless agreed to substantial cuts last year. Their alternatives are limited, however; their tens of billions of dollars in temporary tax hikes and program cuts in recent years failed to end the state's chronic budget problems.

The governor blamed legislative inaction for the deep wound to state services. He said if controls on state spending that he has long sought were in place, the budget gap would be much smaller. He also accused the Legislature of failing to move quickly to rein in spending after he called an emergency session of the Assembly and Senate in January for that purpose.

The Democrats who control the Legislature noted that Schwarzenegger vetoed measures they approved earlier this year to address a piece of the deficit. Voters twice rejected the spending controls the governor seeks.

Democratic leaders immediately vowed to reject the governor's plans and craft alternatives, which they said could include new taxes on oil companies as well as the abolition of some corporate tax breaks.

"I am disappointed that the governor has chosen to surrender," said Senate leader Darrell Steinberg (D-Sacramento), "that he proposes a budget that kills the economy and harms so many. … We will not be a party to devastating children and families."

"The Legislature should use this plan as the foundation for the final budget," said Assembly Minority Leader Martin Garrick (R-Solana Beach). "New taxes are off the table with Republicans."

Under the governor's plan, local school funding would be frozen. Education officials say they are owed a $2.8-billion increase, without which they won't be able to cover scheduled cost-of-living raises and other obligations. Education spending has already been rolled back substantially, forcing many districts to impose layoffs, eliminate programs and increase class sizes.

The governor had been expected to call for the elimination of in-home healthcare for the elderly and disabled. Instead, he proposed cutting roughly a third of the program's budget to save $637.1 million. Previous efforts to scale back the program have been blocked in federal court.

Sandy Varga, a Los Angeles home care recipient who is partly paralyzed and must use a wheelchair, was outside the news conference protesting the cuts with unionized home health workers. She said she cannot get dressed or get out of bed by herself and may be forced into a nursing home if she loses her home care.